Andreotti's Visit: Focus on Progress

By Sari GilbertBy Sari GilbertJuly 25, 1977

Italian Premier Giulio Andreotti arrives in Washington Monday for a two - day official visit, confident that the achievements of his 11 - month - long government will allay fears within the Carter administration of political in Italy.

Andreotti's visit, the first in which he will meet with President Carter on American soil, comes as economic indicators are promising. It follows by less than two weeks the ratification of a new government program worked out together with Italy's Communists.

The 58 - year -old premier considers the Communists - approved, six - party program a major achievement that will increase the stability of the country and of his government by helping to solve Italy's pressing economic problems and reduce spiralling crime and terroism.

The support of a great popular force like the Italian Communist Party is "important" to any Italian government intent on asking its citizens to make sacrifices, he said today.

Andreotti, a Christian Democrat, has depended on direct or indirect Communist support since formation of his government last August.

He expects Carter administration officials, concerned with the growing strength of Western Europe's Communist parties to ask him whether the Communist approved program is a forerunner of the so - called historic compromise that would bring the second - placed Communists into the Cabinet.

In an early - morning interview, Andreotti told the six - party agreement that took more than three months to conclude was "not a turning point in history," "not political alliance" between Italy's two largest parties and "not the historic compromise between Christian Democrats and Communists that would more or less exclude all of Italy's other political forces."

He described the current arrangement as a "program worked out by a broad group of parties seeking to solve the country's problems and agree on certain points of legislation and policy," the setup is "not to be considered eternal," he said, but is "a happy circumstance in a situation in which no single Italian party or coalition has a majority in Parliament."

The delicate balance of forces in a system dominated by two parties, with contrasting ideologies but a common interest in solving immediate problems, has made Andreotti's third government (he was premier in 1972 and again in 1973) one of the most stable in recent Italian history.

He has used his support from the Communists to initiate action on many overdue reforms, thereby increasing his reputation for efficiency and probably lengthening the duration of his government far beyond the 10 - month average of the last 30 years.

Accused by conservatives within his own party and other centrist groups of being too open toward the Communists, Andreotti, known for his pragmatism, said: "At present there is no alternative. We must take the political situation as it is and not as we would like it to be."

Christian Democratic reliance on Communist support began when the former allies of Andreotti's party - the Socialists, Social Democrats and Republicans - refused to continue the intent on all points except domestic center - left alliance that governed for 15 years until early 1976 and urged consultation with the Communists.

Andreotti stressed this weekend, however, that "Just because our problems are so serious and austerity is so necessary, we need to have the Communists on our side." As an example, he said that Communist support during the last fall's severe monetary crisis had been "very important."

That monetary crisis, which saw dollar reserves dwindle drastically to $1.5 billion, provided the background to Andreotti's visit to the United States in December, when he sought American support for a $530 million loan from the International Monetary Fund and a U.S. Treasury guarantee for the lira.

This time, Andreotti said, the situation is different. He admitted that "a realistic picture" must include such continuing problems as unemployment, inadequate energy supplies, high labor costs, unresolved investment needs - particularly in the less developed south - and increasing crime and political violence that could discourage foreign investment and tourism.

For all the problems, the Andreotti government can nevertheless point to solid economic improvements as an indication that the country is a good credit risk. A stabilization plan begun last fall has led to a drop in the rate of inilation, a balance - of - payments surplus on current account, an export boom and a massive buildup - to $6.5 billion - of foreign reserves.

Italy still has a $19 billion foreign debt, but non government sources confirm that economic policies currently in effect have so far kept Italy within the targets set by an IMF letter of intent an all points except domestic credit expansion.

Inflation, originally projected at 27 per cent, is now running at about 15 per cent: there is a slight margin on an agreed - upon cost - of - labor index; cash expenditures are down, and a ceiling on the treasury defict is likely to hold. In additon, a gradual reform of tax collection has reduced evasion to under 20 per cent of total national income, an American financial expert said.

The Italians considered the decision by the IMF to grant the $530 million loan a "certificate of financial respectability," and Andreotti is now hoping that meeting its conditions will further improve Italy's economic image.

For this he needs the support of both the Communists and the Socialists, who have influence over the powerful trade unions. He is also hoping for American assistance - not in monetary terms, but in support for improved trade relations and increased private investment, needed to offset a projected slump in the growth rate next fall.

Another major problem is energy, since the country lacks any coal, oil or uranium resources. Andreotti hopes to convince Carter that Italy's plan to build 12 nuclear power plants - with foreign financial and technological assistance - does not conflict with the President's commitment to nonproliferation.

The six - party agreement, criticized by some for its something - for - everything, one approach, is viewed by Andreotti primarily as a tool for eliminating a 30 - year division that pitted Communists against Christian Democrats and made effective government impossible.

Andreotti is concerned whether the Communist Party leadership in the long - run can control its more "Stalinist" base, but he nevertheless believes that Communist claims to have changed should be taken at face value and that their verbal allegiance to NATO "should not be underestimated."

This does not make him a pro - Communist, he says, adding that he hopes no one will classify as "left - wing" his desire "for an Italy in which unemployment is reduced and extreme income - level differences are removed."